Iron ore price overhangs ferrous scrap market
Tuesday 10th March, 2015
The ferrous scrap metal sector within the UK continues to come under pressure as market demand for scrap weakens because of lower iron ore prices.
Iron ore
The fall in iron ore prices puts pressure on the customers of the ferrous scrap sector because the customers for the material are traditionally electric arc furnaces rather than blast furnaces.
The iron ore price has fallen from about $96 per tonne last summer towards $70 now.
One analyst explained: “The lower iron ore, energy and coke prices are of a big benefit to blast furnace operators because they use much less scrap, perhaps around only 25% of the input compared to electric arc furnaces which use around 80% scrap.”
He added that the export market is in a state of volatility at present because of the uncertainty over whether or not scrap prices would fall further in the wake of steep falls seen in recent weeks.
“Some producers, such as car manufacturers, will keep their scrap moving through but others may sit on material and look to make scrap less available which may have an impact on the market. The situation puts a lot of cashflow pressures on the sector.”
Within the UK this has been a major factor in the reduction of prices for ferrous scrap to as low as £60 per tonne on the gate for light iron in some places.
ENDS
Source: www.letsrecycle.com
